nasdaq falling 1.29%. why ticktock portfolio? because it's becoming evident that we don't have just one traumatic worry ahead of us, the fiscal cliff itself, but a second one, which is that time's not on the side of the compromisers anymore. there's just too much going on in washington to presume that even like-minded people can wrest the debate from the partisan extremists of either party, those who sink below and not rise above. even if you're confident that a deal can be reached someday, you had to have your breath taken away by the first question from the press after the president gave an impassioned statement about the need to avert the cliff that's going to raise everybody's taxes and just cause such havoc. that's because the question was about general petraeus.

not the financial time bomb facing us. oh, no. petraeus? petraeus? don't you know this is bigger than petraeus? we're sunk if you don't. between the distraction of the petraeus affair and the slew of holidays ahead you've got to start wondering if we might plunge from the cliff because of the sheer lack of days before what everyone's beginning to recognize as the potential for a financial armageddon. before i get to what could work eventually, eventually, the emphasis is on eventually in this ticktock environment. not tomorrow but eventually. maybe a little bit tomorrow. let me just say that we're now going through a process. it's a process that's not unlike what happened last year when we faced the debt ceiling fiasco. everything's based on washington, isn't it? we fell 19% peak to trough before avoiding that catastrophe in the nick of time. and during that decline it didn't matter what you bought. you initially lost money regardless. it turned out to be, though, and this is the operative term for me, not just fiscal cliff, no pain no gain. it was a no pain no gain scenario. i think it's going to be this

way this time around too. no pain no gain. today we found ourselves in the thick of you're going to lose money even on the best of stocks moment. i'm not going to deny it. when you have cisco report a magnificent quarter of tremendous guidance and you hardly get a gain, when you see a stock like home depot headed below where it was when it reported stellar results yesterday you have to accept that earnings alone can't save you. i'm a huge believer that those two names belong on your shopping list as does cramer fave pet smart which reported terrific numbers after the bell today. and you know what i think it will only fit the pattern of home depot and cisco, big rally and then a steady deflation courtesy of our nemesis, fiscal clifford, the big red ink dog. i will have some other -- fiscal clifford. the big red ink dog. listen if can't make you laugh the all, what's the point? okay? later in the show, stocks of companies that reported better than expected sales and profits and gave you great outlooks not unlike cisco and home depot that have already been hammered. i've got them. okay? and i'm going to give them to you. and they can be picked at under

the now new dictum of no pain no gain. you see, funny thing about the way the money management business works. what you have to anticipate now is exactly what happened during the sickening debt ceiling decline last year. first everything came down. people forget this. everything came down. that's where we are now. in the midst what's now a 5% decline from the election when the fiscal cliff came to the fore, but an 8% decline from the highs which i think is more relevant. everything gets sold in this period because the unknown is so murky that many people can't take the pain. i remember in the summer of last year flying off to the bakken shale in north dakota at the height of the debt ceiling crisis and a nice woman sitting next to me asked if she would get her social security check if congress didn't come to an agreement. certainly our tax rates are going higher in 2013. our meaning everybody's unless something's done. but this time we're still going to get social security checks. and i could argue that in the gradations of financial armageddon the fiscal cliff is a lesser potential worry than that financial armageddon because you're going to -- no one thinks their social security checks aren't going to come. second, when the clock was ticking last year the universal fear was that the u.s. debt would be downgraded.

you know the moody's and s&p thing. talk about a frightening unknown. i remember being at eagles training camp in lehigh and the players were all worried about are u.s. government bonds coming under pressure from our government's profligacy. they're worried about the moody's and s.e.c. downgrades. wrong on two counts. first, they should have been far more worried about their performance on the field. [ rimshot ] and second, interest rates actually went down and they went down very big. so worry completely misplaced. totally misplaced. now you got the picture. big scare after stocks went down initially but then after a decline similar to the one we're having now we began to see stocks stabilize. which ones stopped going down first? that's what we've got to figure out. there are curious pictures of stocks that do well in a recession and stocks that had gotten down to where their yields were very competitive against prevailing interest rates. it's true that if the fiscal cliff is not bridged your after tax dividend yield will be less than you're currently getting and we just don't know what the rate is. but that doesn't matter if you're buying for tax advantage account like an i.r.a., you need

some income and even if you're buying for a taxable account we're already down 8% from the highs. levels that caused many stocks to slow the velocity of the decline during the debt ceiling struggle. what fits the picture? how about coca-cola? my charitable trust owns this one. you aren't going to drink less coke if we go off the fiscal cliff. but more important coke's business is not u.s.-centric. its growth is overseas. plus coke's raw costs, plastics packaging, fuel, materials that go into the drinks, they're all going down, in many cases faster than the stock market. they go down with the fiscal cliff too. that's why coca-cola's barely budged. how about general mills? same set of circumstances. declining raw costs, especially grains which have been plummeting but no diminution of demand. and what other stock rallied today, finishing up 51 cents? i believe that is not a coincidence. that's what happens in the no pain no gain dictum. nor is the relative strength of cramer fave conagra, a food company that had been susceptible to inflation will be equally susceptible on the way down, no, this is not coincidence the stock only fell 14 cents. starting to stabilize already and money's going to flow into them. remember i said at the top

where's the money going to go? conagra, general mills, coca-cola. the other stocks that are working right now, that are beginning to work, that are going down less than the others, the velocity of the decline's going to break, the ones where the after tax yield is initial initially wasn't enough to make you want to snap them up but the decline has become so sudden, so severe you can't afford not to start buying these. small but buying them right into the broad sell-off. verizon. i haven't talked about verizon lately because the stock moved too much. clearly no bargain at we traded when we found out how well it was doing in the recent quarter. $42? nearly 5% yield? that's a huge decline. rivaling one from last year's debt ceiling sell-off. verizon was then in the 30s, now in the 40s but the business is much better than last year and the yields away from stocks are more skimpier. could that be why the stock fell just 30 cents today? i think so. buy a little at 5, 5 1/2 and if ever gets to 6 you buy more. we know the clock is ticking. we're not stupid here. we are losing hope that -- we're losing a bet that it starts at

7. that's a traditional bond -- but we know from last year's 19% decline that not all stocks keep going down in lock-step and when the averages were down 8% from the highs last time around what you had to do is the exercise i'm doing right now. you had to find the stocks that were gradually putting in a bottom. last year at this time i did this. this year at this time i'm doing it. i think the same thing's starting to happen now. here's the bottom line. there's no hurry to put money to work all at once right now because like last year all the early birds got crushed, including the eagles. but for some stocks it's already too late to sell and for others last year's armageddon playbook, hey, i'm bringing it out. it says it's right to start buying the recession proofers and the big yielders right here. i don't think this armageddon this time, armageddon 2, i don't think it will be any different. matt in tennessee. matt. >> caller: cramer, hey. wanted to give you a big fiscal cliff boo-yah. >> yeah. let me give you a bungee jump boo-yah. what's up there? >> caller: i'd like to say hi to my 6-month-old son beckett and hope he becomes a great investor someday. >> well, how's he doing there? this is when he should be

starting investing because he's got a big time horizon. what's going on? >> caller: i'd also like to pray the nhl lockout ends soon. >> me too since that's one the philadelphia teams that could do well. >> caller: my question is about aeropostale, a.r.o. i know you're not big on the teen retailers but i was looking at it and it seems cheap. what do you think? >> cheap. abercrombie was a combination of a short squeeze because people expected the worst and the possibility of a leveraged buyout which people are always predicting. i've got to stick by my guns. teens -- i'm trying to get the holiday gifts right now for teens. it's mind-numbing. it's just too hard. and you don't want to get into that mine field. which is why i say will you please go on amazon and tell me exactly what you want and i'll go get it. jay in washington state. jay. >> caller: hey, jim. boo-yah. it's jay from beautiful bainbridge island, washington. >> do i ever wish i were there just -- i don't know, with a boat drink.

>> caller: it's raining. you don't want to be here now. nevertheless. i called some time ago about tesla and you said it was too speculative, all sizzle and no steak. since then i've been doing my homework just like you taught us and the analysts and conference calls have all been glowing. well, just today deloitte ranked it number one on their 2012 technology fast 500 list. not only that, the model s has been named car of the year by automobile magazine, yahoo, and the coveted "motor trend." jim, i've test driven the model s, and as the "wall street journal" car guy says, it's a beautiful car that goes like the stink of hell. i couldn't agree more. do you still think it's too speculative? >> i was talking to my friend mike faber -- i mean david faber. mike faber's the guy from homeland. he said jimmy, have you checked out the tesla? my takeaway is tesla didn't go down because romney lost but i need earnings. i've got enough problems with the companies that got big earnings, big dividends, i don't need to go into the speculative mode right now.

please be careful. with the fiscal cliff looming the early bird is not catching the worm right now. it's just getting crushed. okay? the fiscal clifford, yes -- fiscal clifford, the big red ink dog is going to crush the early birds. it's too late to sell for most stocks already, though. well, let's say for a lot of them. and it's right to start legging in on the ones that worked last time. recession-resistant and the already back to higher yield stocks. "mad money" will be right back. >> announcer: coming up, party planning. >> surprise! >> announcer: when quarterly reports take the street by surprise, investors can be the ones receiving gifts. tonight, cramer's celebrating two retailers that left the market awestruck after earnings. but the fun's not done yet. there could be more room for these stocks to rise. find out who they are and if they belong in your cart. and later, with fears of the fiscal cliff swirling around stocks, there's only one true way to protect your portfolio.

so call, e-mail, or tweet cramer and get ready to play the only game that can help you rise above it all. "am i diversified?" plus, on the up and up? the headlines called for facebook to struggle today. with more than 700 million shares of the stock spilling onto the market. but instead of falling the social network had its best day to date. is it finally time to like facebook? stick around to find out. all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer. #madtweets. send jim an e-mail to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. [ male announcer ] it's simple physics...

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this is not a friendly market. it's not a particularly fun market. it's certainly not a market that makes you want to buy any stocks. it makes you want to sell them.

but as i told you last night, it would be the height of irresponsibility to sell everything. trimming, yes, but selling, no. because it's very possible at some point there will come a time when washington reaches a deal to fix the fiscal cliff and you absolutely do not want to miss that moment even after today. it was clearly discouraging to think we're nowhere near it. it's worth hanging on just for the possibility, though, that there will be some gains, but not to every stock. the question is what should you hang on to? tonight i'm answering that question by throwing a surprise party to celebrate the stocks that are worth buying here. not a typical surprise party. i don't mean a party that's a surprise. it's way too gloomy for that out there. i mean a party for companies that have reported fabulous upside surprises yet thanks to this recent sell-off the stocks are actually trading below where they were when the earnings came out. if that's not a bargain, i don't know what is. provided that the company can do well in a recession that's caused by the fiscal cliff. so let's get with it.

take gnc holdings. gnc for all you home gamers, the vitamin store chain with more than 7,800 locations around the world including 6,000 right here in the u.s. this is a classic play on the healthy living theme we've talked about many times on "mad money." healthy living. think you still want to do it even after the cliff happens? and back on november 1st gnc reported what amounts to a triple play. first the company delivered a three-cent earnings beat off a 58-cent basis. second gnc's revenues beat wall street's expectations too. third they gave upside guidance on forecast. higher than expected earnings and revenues for the full year. good forecast. that's the triple play. those were some excellent results. one of the very few companies able to run that gauntlet according to some excellent research put out by the good people at bespoke investment group, which actually tallies up all these surprises and looks for the biggest ones. you would think that gnc checked off all the boxes necessary to go higher, earnings beat, revenue beat, guidance beat. but in fact the stock got slammed after these numbers came out.

before the quarter gnc was trading at $38.67. the day it reported it dropped about a point. since then the stock has fallen as low as $34.57 today down four bucks or more than 10% since the upside surprise. 10%. a little bit more than the s&p has fallen since the peak. what did go wrong if anything? why has gnc been crushed despite posting some terrific numbers? you have to understand that going into earnings the stock had run up 34% for the year which meant the expectations were high and gnc was in a prime position to get clubbed if there was anything wrong with the quarter. now, on wall street when a company reports perfect results that are absolutely flawless we say there's no hair because bald is beautiful in the world of finance, if not the country that is cramerica. gnc, though, had a little teeny bit of hair. it was some peach fuzz. and that can get rid of -- you can get rid of that with some depilatory or some of the lasers they use today, the groupon deals you get every morning. but the market disagreed. the first piece of hair was gnc's loyalty card program.

the current program hasn't been changed in years. the way it works is gnc's customers pay $15 to buy a card, gives them a 20% discount on most products in the store during the first week of every month. this is a bad way to run a loyalty program. but even with this loyalty purchases account for 60% of gnc sales. i was surprised it was that high. here's what people got all hot and bothered about. at the moment gnc is testing right now a new version of its loyalty card program in several markets which works more like a supermarket loyalty club. you buy the card and you get a separate lower price on virtually every item every day but not 20% lower like the old version. about a third of the chain is now on this new model and gnc expects to transition the majority of its stores or possibly the entire chain by the end of next year. the problem is this new loyalty card has created a level of uncertainty about the future of gnc's gross profit margins. some are also worried that it could cap the company's earnings upside by giving people too many discounts. in other words, while this quarter may have been an upside surprise, a lot of people are worried that the new loyalty

card will lead to downside surprises in the future despite the guidance which was so positive. the other issue with the quarter had to do with gnc's same-store sales. the analysts were looking for a 12% increase of domestic company-owned locations but gnc only posted a 9.8% increase even as the same-store sales at their franchises, they rose 14.3%. absolute numbers were stellar but they were lower than expected and that was enough to take the wind out of gnc's sales. even more nitpicky when you look at the same-store sales on a two-year stacked basis they seem to be decelerating and we know the company's up against tough comparisons going forward. all i can say is if gnc missed the street's same-store sales targets but still blew away the earning estimates i don't know, to me management's executing superbly. there aren't many that are able to do that. final negative, this really hurts. last week gnc did an $11.73 million share secondary offering so that some of the shareholders that took it public last year could sell. $25.30 which is now less than a point above where the stock is trading. but aside from the insider selling, which i am never crazy

about but doesn't necessarily mean things are going awry, i think these negatives are bogus. let's go through them. gnc delivered a very strong quarter. and you're now getting the stock for $4 less than it was reported. to me that's the most salient piece of information out here. not only that but at least one of the reasons people sold gnc was actually a reason to buy. this new rewards card program. we've studied this. forget the anomalous worries about what it could do to gross margins down the road. gnc's already rolled it out in a whole bunch of locations and the results are positive, not negative. in the markets where they're testing the new program it's already leading to higher growth in transactions and each time the program is implemented it leads to a pop in same-store sales. the gross margin, it takes an initial hit of about 200 basis points when they stop charging $15 for the card and start giving it away for free. but the store made it back from the raised price structure. it's not jcpenney. it's not costco either but it's not jcpenney. they wouldn't switch to a new discount model if they didn't have evidence it would make more money. why would they commit financial suicide? these are smart guys.

plus gnc's rolling out a host of new products in 2012 and 2013. they launched a new sports nutrition line in partnership with mark wahlberg called marked. and online business is growing like a weed. traffic up 35% last quarter. gnc is cheap. after the latest sell-off it's trading at 13 times next earnings. but a very strange anomaly. i know a lot of growth managers who would be willing to pay 20 times earnings for a stock with that kind of growth. here's the bottom line. gnc, it did report. we forget because everything's so gloomy now. a triple play. better than expected sales, earnings, guidance. yet its stock went down for a bunch of nitpicky reasons. and now i think you can leg into it as gnc, a non-economically sensitive play, should begin to bottom not far from here as i described with other stocks at the top of the show. remember, almost nothing's going higher right now, but recent history of armageddons teach us that some stocks break their declines ahead of others. i've got to tell you, i think gnc, i think it fits the mold.

after the break i'll try to make you more money. >> announcer: don't go anywhere. the celebration is just beginning. cramer's got another retailer that could have more surprises in store after better-than-expected earnings. so stick around, shoppers, and find out if this stock belongs in your basket. and later, on the up and up? the headlines called for facebook to struggle today. with more than 700 million shares of the stock spilling onto the market. but instead of falling, the social network had its best day to date. is it finally time to like facebook? stick around to find out. all coming up on "mad money."

oh. it's a surprise. an upside surprise. i know you don't care. but i'm begging you not to let the lousy state of the market blind you to the fact there's still plenty of real worthwhile opportunities out there and some are getting quickly to prices we might actually like! even as we approach the dreaded cliff. i know there are a lot of disappointments in the latest quarterly earning period. tons of them. but there are also some winners. and many of the stocks that reported good numbers are now rising above. but they're being obscured by worries about the fiscal cliff. and that's why we're throwing our surprise party tonight here

on "mad money" where i highlight companies that delivered upside surprises. but have been neglected, severely neglected. they've been overlooked. and they've actually seen their stocks go lower. and don't forget, i expect home depot, cisco, maybe even petsmart in a couple days to go lower because of how horrible this market is. the good people at bespoke investment group went through all the companies that reported in this earnings period and they tallied up every one that ran a very tight gauntlet, not unlike the one that clint ran in arizona. the company had to beat wall street's earnings estimates, had to beat the revenue estimates and had to give the guidance that beat the expectations of the analysts. tall triple play order. and you'd better believe this was not a long list. and most of the companies i still didn't like. but any company that makes it on here, it's doing well. we looked at this group of companies that had made this amazing triple play, especially amazing considering the difficult environment and we searched for the ones where stocks were not getting the credit it deserved and could still do well in a recession -- recessionary environment that we

will get into if we go over the fiscal cliff. which looks increasingly likely after the president made it pretty clear today i felt that talks aren't going hot and heavy. that's how i came up with gnc which i recommended earlier. now i have another neglected triple play for you. it's -- have i overdone this yet? it's cvs caremark. the giant household name pharmacy chain with roughly 7300 stores. it's also a pharmacy benefit manager, or pbm. yeah, we're having a birthday cake. surprise cake. ooh. it's one of those ones that has -- it has ice cream in it. look, first of all, everybody knows what a pharmacy does, right? right? i mean, the fiscal cliff hasn't gotten you that cloudy yet. you still know what i pharmacy is. but a pharmacy benefits manager? a little more arcane. cvs got into this business in 2007 when they bought caremark.

basically pbms manage prescription drugs for everybody using their bargaining power to help their clients get lower prices for drugs. but cvs caremark is unique in that they're the only pharmacy benefit manager -- this is a bogus fork they gave me here. that is also its own major league pharmacy. now, cvs reported back on the morning of november 1st and like i said before it had run the triple play gauntlet. the company earned 85 cents a share, beating the estimates by a penny. revenues came in a bit more than $30.2 billion up 12.12% year over year. that's $140 million better than expected. i'm calling that a gigantic beat. and cvs's full year earnings guidance also surprised to the upside drilling down further. the caremark pharmacy benefit side of the business was on fire. it beat the company's previous guidance handily with operating earnings up 19%. on the retail side cvs same-store sales were up 4.3%. also above the previous guidance of 3%. thanks to strength in the pharmacy end of the store. and to the beat it delivered to

competitor walgreen's, which it has just really taken it to. yet despite these strong results cvs barely budged the day it reported. it was almost as if somebody took a bowie knife and stuck it into the upside surprise party. it's even worse. the stock's actually come down since then. before earnings cvs was trading at $46.60. now it's $45.41. by the time you watch this and wait for tomorrow, probably $44. wait a second. stock's way down from its highs. it was at $49 last month. that's an 8% decline. pretty much big move for a large cap company like cvs, equal to what the s&p's going down. what the heck is going on here? why is cvs being punished after performing a rare triple play during a generally disappointing earnings season? were there some hidden negatives below the surface? when the market's going down we always find negatives, right? was the conference call really bad? no. cvs is being held back by worries that don't make much

sense to me and of course being brought down by the same old same old. first, some people are concerned about the broader macro situation. they think if we go over the fiscal cliff a weak economy could damage cvs's business. can we just stipulate that the pharmacy business is the last place you stop shopping in a slowdown? i'm not going to some cheaper toothpaste. i'm not going to forego toothpaste. i'm not going to lighten up on the medicine. i think the stock is already beginning to overcompensate for the looming cliff. one of my absolute favorites. of the cliches that we've been using, i've been going with looming cliff today. oh, and we heard after the bell that warren buffett's berkshire hathaway sold its cvs stake back in september, which even though it was before all the good news could weigh on the stock tomorrow. second, cvs's stock has been hurt because of bad results from some of its competitors. on the pharmacy benefit management side, express scripts reported an absolutely dismal quarter. talk about a party pooper. what are these, titanium balloons? anyway, that made people worry

about caremark. on the pharmacy side walgreen's reported disappointing numbers. people are extrapolating from walgreen's and express scripts and assuming therefore cvs must be bad too. that's insane! that's insane. i mean, cvs just reported a terrific quarter. their pharmacy benefit management business was especially fabulous. the obvious conclusion is cvs is taking share from the competition. bad news for express scripts and walgreen's is good news for cvs. when juniper and hewlett-packard were off of cisco doing well and cisco was killing them. come on. innocence by association. speaking of walgreen's and express scripts they're a big part of the reason why i've liked cvs for so long. last year these two companies got into a dispute which ended with express scripts removing walgreen's. making it so 90 million expression scripts prescriptions could no longer be filled at walgreen's. that gives cvs a fabulous opportunity to take share. they buried the hatchet in july something that caused cvs to drop $4 in a single day. but now it looks like the damage

was already done. many of the customers that switched from walgreen's to cvs, they seem to be staying at cvs. the dispute between express scripts and walgreen has been and remains a big win for cvs. this pharmacy benefit manager side. there it is again. the express scripts merger with medco health which closed in april. medco came with a lot of problems it turns out. the integration issues could allow cvs caremark to do better in the selling season for 2013 as they ramp up for the coming year. just like walgreen's express scripts problems, this would be terrific for cvs. the company also benefits from the wave of branded drugs that are going generic. generic drugs are cheaper but they also have much higher margins for the pharmacy, pharmacy benefit managers. of course obamacare is going to happen which should lead to about 30 million more people with health insurance who need to pick up the prescriptions somewhere. hey, you know what? it's probably likely going to be cvs. don't forget, it's flu season. flu season fortunately -- hey, you know, knock wood, it's been pretty benign.

can you imagine? here's a stock that's barely nicked by the fiscal cliff and benefits from obamacare but they're putting it on sale anyway like a stock that gets hurt by obamacare and crushed by the fiscal cliff. 13.2% growth rate. the i think it's pretty cheap. plus they have an analyst day coming up. i think management's going to tell a very good story. i would begin -- remember, i'm not telling you -- begin to buy the stock into weakness. i'm forecasting the stock to be down another dollar tomorrow. maybe that's where you start. you start with a little piece! not a big piece. a little piece of pie. maybe -- maybe like something like this. this big. that should be your first buy. the bottom line, cvs delivered a triple play quarter. but with all the fear over the fiscal cliff the stock's been actually going lower. i think that's crazy. remember, all stocks are going down right now but some are going to bottom well ahead of others and cvs lies squarely in that sainted category.

try some. ted in oregon! ted. >> caller: hey, jim. i want to give you a big boo-yah from portland, oregon and say thank you for doing the show. >> i'm not going to worry about football. i've got to tell you, oregon football's really good. unfortunately, i've got to stay up until 3:00 a.m., which is exactly when i get up in the morning. but go ahead. >> caller: my question is about five below. five. i got rid of it before the recent drop. i just read the company's opened a lot of new stores, got a new distribution center and their earnings are coming out on december 11th. i'm wondering if this pullback is a good time to get back into the stock. >> we're not in that kind of market anymore. the fiscal cliff is taking apart these kinds of stocks. so five below -- let me tell you. i'm going to give you a really cynical reason why i don't want you to touch five below. when i say cynical, it's not what you want to hear. and the answer is, just one second. drum roll please. what happened to my drum roll? i've got the rimshot. [ rimshot ] the stock is up gigantically for the year. a lot of people have a double in

it, or almost a double. they're going to ring the register. the fiscal cliff says you should. darn it all. how about andrew in florida, please? andrew. >> caller: professor cramer, got a ba-ba-ba-boo-yah from south florida. i'm talking about michael kors, ticker kors. yesterday in my opinion they delivered stellar earnings. the company absolutely crushed expectations and dropped my jaw. and i'm asking you, do you think that kors will continue to advance and be one of the few luxury brands to be invested heading into the holiday season? >> all right. this is, again -- i know this is heretical to those of us who do a lot of work -- i'm sitting there last night. okay? i got no teams to root. i've got nothing on whatsoever. and here i am. so i said i'm going to go read the kors conference call. every page is better than the past. every page looks great. it's like a really great episode

of some tv show you like. but you know what? it sells at a gazillion times earnings and everyone's got a profit in it. so people are taking profits. you have to wait until next year. unless we resolve the cliff beforehand. it's the "mad money" upside surprise party, and you're the ones who are getting all the gifts. i'm picking stocks that beat sales, beat the earnings, and beat the forecasts that are somewhat recession-proof or do well over the fiscal cliff. and cvs delivered that triple play quarter. but you'd never know, never know it. fiscal cliff is sending stocks diving, but some will bottom sooner than others. this one's going to taste real good down a dollar and a half. stay with cramer. >> announcer: coming up, are you ready to get charged up? cramer cranks up the voltage and goes electric on an all new hyperactive "lightning round." and later, with fears of the fiscal cliff swirling around stocks, there's only one true

way to protect your portfolio. so call, e-mail, or tweet cramer and get ready to play the only game that could help you rise above it all. "am i diversified?" all coming up on "mad money." bp has paid over twenty-threebp billion dollarsnt to the gulf. to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america.

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it is time! it is time for the "lightning round" on cramer's "mad money"! say the name of the stock i tell you whether to buy buy buy or sell sell sell. my staff prepares the graphics on the fly. play until this sound. [ buzzer ] and then the "lightning round" is over. are you ready, skee-daddy? time for the "lightning round" on cramer's "mad money." john in washington. >> caller: boo-yah from the great columbia gorge in the state of washington! >> many callers from washington and i'm always happy to hear that. what's going on? >> caller: well, i think you're very interesting and entertaining and i like it! but i'm more interested in magnum hunter. mhr. >> this is a real speculative stock, and you need to see oil at $100 a barrel, not $80 and change. and that's why the stock is -- >> don't buy. >> unless you want to speculate. let's go to bob in virginia. bob!

>> caller: jim, how are you? >> all right. how about you, bob? >> caller: pretty good. my stock is mine safety appliances. symbol msa. >> you know, bob, to tell you the truth, i haven't looked at mine safety appliances in ages because there's been such a decline in mining. i've got to come back with a fresh look at that. i cannot opine on something i have not looked at lately. let's go to rahul in wyoming. rahul. >> caller: how are you doing, jim? all right. how about you? >> caller: i was looking at invensense. >> two in a row. i don't know how it's doing right now. we've got some real homework to do. louis in texas. >> caller: sandridge energy. sd. >> not unlike magnum hunter being challenged by a big holder. tom ward has cobbled together a lot of about good properties for sandridge, but oil needs to be

up big for this thing to work and oil's not. so the stock is going to languish and lose points. let's go to joe in maine. joe! >> caller: yes. hi, jim. my stock is arena pharmaceuticals. arna. >> even in a good market, i don't want to own arena because it's got competition from vivus and because i don't believe in the diet pill drugs. but in a bad market you've got a chance to sell and you should do that. jim in arizona. >> caller: ak steel. >> when this stock was higher i said sell sell sell. the company argued its case to me. i said okay, i'll present the other side. the other side, their case was wrong. the stock is going lower. it's very difficult to own a steel stock, even nucor. i don't want to touch it. let's go to grant in hawaii. grant. >> caller: bwa. borg warner and considering buying more -- >> i want you to hold off on that. why? because borg warner happens to be the parts company i believe

is most levered to european parts. of the many car parts companies. and therefore you want to stay away because a lot of the capacity is coming out of europe. just ask al mullally of ford. and that, ladies and gentlemen, is the conclusion of the is the conclusion of the "lightning round"! and his new m two things --

the market's got many people feeling down, feeling confused, frustrated. i urge you not to lose faith in it. just like last year. we came back. as i highlighted with cvs and gnc, petsmart, whatever, there are plenty of worthwhile opportunities out there. we are reminded again it's the importance of homework and most of all diversification. because if you had nothing but all cyclicals you got whacked. the key to avoiding losses in this market is stocks that know how to execute, that have internal catalysts, are diversified, able to transcend fiscal cliff fears or stocks whose growth can't be stopped or have very big yields and that's why we play am i diversified. you call and tell me your top

five holdings and i tell you if your portfolio is diversified enough. maybe you need to mix it up a little. i want to kick it off with a tweet why @zhangwhart. anyway. who writes, "am i diversified? amazon, apple, disney, national oil well varco, and terra data. [ buzzer ] all right. okay. wow. first of all, this is a very speculative portfolio. i don't like that. it does not have the kind of -- you could say that they're all the same in terms of what's known as high beta. they're risky. teradata is a play on the cloud and big data. disney, entertainment. amazon, retail. national oil well varco, the premium technology in the oil patch. and apple, technology. so we've got two technologies right here. you're going to get rid of teradata. i've got to give you some yield. i've got to put you in -- let's go with a merck or a pfizer. let's give you some yield. or a verizon. do that now. because you're going to need it. you've got to make that change now. let's go to mike in my home

state of pennsylvania. mike. >> caller: how are you, jim? >> mike, it's tough to do this show in this environment. how have you been? >> caller: great. a big boo-yah from shippensburg university. >> a great school. many of my teachers from springfield high, montgomery county went there. what's up? >> caller: i have some stocks for you. apple, aapl. express scripts, esrx. humana, hum. verizon, vz. and exelon, exe. am i diversified? [ buzzer ] >> all right. here we go. apple is tech. exelon is utility. that's the old philly elec. and comoil -- seem to be committed to the dividend which is why it's going down. express scripts is a pharmacy benefits manager. verizon is telco. these two are too much alike. even though express scripts is down i want to get rid of that, pick up some more yield. i want to go with -- unless it's retired i want to go with the mark west which held up very well. master limited partnership. health care, utility. be careful of that yield.

i'd prefer you to be in duke because they're not going to get rid of their dividend. apple's tech and verizon nice yield. give you a little yield protection and also a little less beta. wow. hey. even in the toughest times we play am i diversified. "mad money's" back after the break. >> announcer: coming up, on the up and up? the headlines called for facebook to struggle today. with more than 700 million shares of the stock spilling onto the market. but instead of falling the social network had its best day to date. is it finally time to like facebook? stick around to find out.

the money section of "usa today" today said it all. facebook could be in for it today. courtesy of the gigantic lockup expiration that occurred at the opening of the day's trading. why was the paper so sure that today would be facebook's day to get its face ripped off? to get hammered? because 77 million new shares hit the market.

well, how about the fact that the bulk of the rank and file employees were allowed to sell after today's lockup expiration? many of them have their life savings tied up in the stock. perhaps because there's a terrible track record of past facebook lock-ups, one which led to a 6.3% fall when it expired and the second one led to a 3.8% decline when it expired. plus there is the sheer size of the deal. 777 million shares? a level of supply that the paper pointed out would be hard to digest. especially given the public's sour sentiment toward the stock. so what happens? not only does the stock not plummet but it rallies. rallies big! in fact, having its best day ever. up $2.50 on a 12.6% gain. come on, the market was down horribly. what gives? is that just the nutty ways of wall street? are things so upside down that a stock goes up precisely because it's supposed to go down, even on a horrible day? no, no, no, no, no. it makes perfect sense, and here's why. first, this is one of the most talked about, known about, and widely talked about expirations i've ever seen. that means many were braced for it and didn't take anyone by surprise.

when events are well known, they generally have less impact than if they'd taken you by surprise. if we actually had to cliff jump, at a certain point everyone would know it. and it would be in the market. well, that's what happened to facebook with this expiration. more important, many of those who owned insider stock were extremely sophisticated investors. that means it's entirely possible these well-versed holders might have been able to hedge their positions, meaning they got short facebook stock to lock in a big gain the moment they were free to trade. in other words, they were simply waiting for the restrictions to come off so they could flatten their positions since they'd already sold it ahead of time. they didn't want the exposure to the stock and didn't want to take any chances of a further decline in the security. they weren't thinking about it in advance. that accounts for some of the buying today but certainly not all of it. given the big percentage move facebook had coupled with the hideous action in the stock market overall. what else is behind the surge? i think there's a surge after the initial period where facebook was blindsided by the quick migration of traffic from your desktop to smartphone and the concomitantly lower prices for advertisements that mobile gets. management was at last able to readjust and find lucrative ways

to capitalize off this trend. their strategies have allowed them to better harness and monetize the billion users that have signed up for the site, many of whom regularly access it. i think facebook's turned the corner here. many companies i talked to have recently embraced advertising on facebook and are thrilled with it. as we heard yesterday from luxury goods purveyor michael kors as well as buffalo wild wings, domino's and procter & gamble. they're all saying good things about their ads on facebook. fact is there's so much buying today it tells me i'm not alone. do you buy facebook up here? everything seems to sell off in this market after one day or two day rally of good news. so you want to be careful after this move because the market's probably going to go down tomorrow, maybe this one goes down with it. that said if you don't own the stock already i think you should take the plunge if it comes in. today's action tells you that the worst is over for facebook and perhaps the best is yet to come. stick with cramer.

okay. very tough day. now we know a lot of stocks are still going down. remember, the early bird buyer does get crushed. others, the velocity of the decline is starting to break right now. so if you believe in my no pain no gain thesis start to look at the stocks i talked about tonight. maybe do some picking right into the sell-off.